There are five questions business leaders should answer before enacting a fast-follower strategy.
Many companies and leaders have embraced the idea of being a "fast follower," essentially meaning that they wait for other organizations to try something first, and then imitate their success. Whether it's the latest software package, or new office designs, some subset of companies pride themselves on trying the latest and greatest, while a larger set waits in the wings to see how it turns out, presumably adopting what works and abandoning what doesn't.
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The logic to embracing fast-followership is fairly simple. The latest and greatest is usually relatively untested, more complicated, and riskier, ultimately making for a more expensive proposition. In the early days of software, it was fairly standard to avoid the Version 1.0 of a new product and allow other companies to work out the kinks, while a Version 3.0 was assumed to be mature enough to purchase. This became so pervasive that companies quickly moved away from touting version numbers of software, lest no one buy the Version 1.0.
There's an obvious benefit to being a fast follower, but is there a cost?
The benefits of being a fast follower can seem so compelling that I've run into clients where the cornerstone of their strategy was achieving second place--being content to let the market leader lead, while they essentially emulated anything they did that seemed successful, from technology infrastructure to their marketing campaigns. Being a fast follower is also easy to cloak in high-minded ideals like "being a good steward of corporate resources" and "risk mitigation," but at the end of the day there's a risk that your strategy becomes little more than blindly emulating your peers.
This presents several problems. It's easy to let the definition of "fast" slip from months, to years, to essentially never, creating a bias toward inaction for anything that hasn't been proven absolutely reliable in the market. In the worst case, by the time your company decides to follow, you are already three steps behind the industry leaders. This becomes relatively obvious looking at technology. Cloud computing is simply how you do business for many readers, while it's a mercurial and unproven technology for others that might just be considering the wonders of client-server.
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There's also a risk that the crowd you're following has made poor strategic choices, and that you're following them off a cliff rather than toward the future. You may also fail to learn from the mistakes of the entities you're following, repeating their errors while they improve and further cement their lead.
Follow the leaders in following
Perhaps the best example of being a fast follower is Apple. It's easy to forget that the iMac was certainly not the first personal computer, the iPod not the first music player, the iPhone not the first smartphone, the iPad not the first tablet, and the Apple Watch not the first connected timepiece. In each of these cases, another company defined the product and category, and Apple waited until it understood the weaknesses in the original product, releasing a product that addressed those weaknesses and was generally accompanied by superlative marketing that showed potential customers how to use the product. In all the aforementioned cases, Apple didn't just release a new gadget with better features, but added components like iTunes or an App Store that made the product better.
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Contrast this approach with Blockbuster Video, which finally acknowledged the threat presented by Netflix and launched its own DVD-by-mail product. Aside from a blue envelope and slightly more confusing pricing, Blockbuster added nothing unique, and the company ultimately died.
Apple seems to hunt for markets where someone else has identified a need and proven the basic technology, versus Blockbuster, who clearly created a "me too" offering in the hopes of hedging its bets.
As you make decisions on whether to follow the market, do a simple sanity check and ask yourself:
- Are we consciously deciding to follow, or are we using the idea of being a "fast follower" to kick a strategic decision down the road to avoid personal risk?
- What will we gain by following?
- How will we know when it's the right time to follow?
- What signals will we use to determine if we're following the best path, versus following the herd right off the cliff?
- When will we revisit the decision and how will we know when to spring into action?
Like many strategic decisions, it's easy to let events push you into "strategy by default" where you're guided not by a compelling and actively managed plan, but lurching about with each shove of the market or events beyond your control. Acting as a fast follower can be a great strategy when made consciously and thoughtfully, or a fast path to irrelevance if it becomes an excuse for letting go of the helm of your ship.
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